Mr. CAMPBELL. And they are at a disadvantage for that reason, in that respect.

The CHAIRMAN. Thank you. Senator Fong.

Senator FONG. Mr. Campbell, I presume you do not agree with the administration in that the administration stated that it was not in agreement with an across-the-board raise for all employees; is that correct?

Mr. CAMPBELL. Yes. We are in disagreement with the reported intention of the administration not to provide more than a 3 percent pay raise for the people in the first three grades.

Senator FONG. You are asking this committee to give an across-theboard raise to all employees?

Mr. CAMPBELL. Yes, sir.

Senator FONG. You said that you estimated an increase should be about 13 percent; is that correct?

Mr. CAMPBELL. An average of 13 percent.

Senator FONG. Yes. Now is that based on the comparability theory?

Mr. CAMPBELL. Yes, except in those first three grades where comparability standing alone is not a fair measurement.

Senator FONG. Now for the first three grades you feel that there should not be any comparability there?

Mr. CAMPBELL. Up to a point, yes. It should be the only factor. Senator FONG. The administration, in adhering to the comparability theory, has recommended that these first three grades be given an increase of 1 percent each year.

Mr. CAMPBELL. Yes.

Senator FONG. Evidently they have come to the conclusion that they do have comparable salaries with private industry.

Mr. CAMPBELL. Yes.

Senator FONG. Do you come to that conclusion?

Mr. CAMPBELL. That is the reason for that comparability.

Senator FONG. Mr. Campbell, you, I believe, heard the testimony of Mr. Macy when he said that the internal alinement in pay raises has caused a changing ratio between the lower cost paid job with the highest paid job and it raised it, as he stated, to something about 8 to 1 and it has increased to 5.8 to 1. Now, do you care to comment on that as to how your proposal will work as far as this ratio is concerned?

Mr. CAMPBELL. Well, it is true that there has been a contradiction there and we believe that the ratio ought to be restored, the proper ratio ought to exist all along the line in the schedule.

Senator FONG. But have you got a ratio in mind?

Mr. CAMPBELL. Our schedule provides a graduated percentage increase, the schedule that is with this testimony and in H.R. 9935. Senator FONG. So your proposal then to the committee would be that this ratio would be maintained if we have an across-the-board raise for each employee?

Mr. CAMPBELL. Yes. The 13 percent is an average but there is a variation in the percentages we propose in order to maintain this proper proportion in relationship of jobs as you go up the schedule. Senator FONG. Have you been able to work out a classification list for us?

Mr. CAMPBELL. Yes. Senator FONG. I see. 9935?

Mr. CAMPBELL. Yes.

This is in H.R. 9935.

You are proposing that we accept H.R.

Senator FONG. Thank you.

The CHAIRMAN. I believe your statement brings out the fact that you think that all grades, that is 1 on up, should have an increase. Mr. CAMPBELL. Yes, sir.

The CHAIRMAN. You do not mean that there ought not be some adjustments in inequities that you find in some of the grades?

Mr. CAMPBELL. Oh, yes; yes, we believe they should be.

The CHAIRMAN. You believe that there are some inequities and that is up to the committee to correct them.

Mr. CAMPBELL. Yes, sir.

The CHAIRMAN. Another thing, when you refer to 13 percentthat is the figure which you have reached-you do think that if that figure is too much, it should be scaled down in proportion to the classifications that you have given.

Mr. CAMPBELL. Yes, sir.

The CHAIRMAN. Any other questions?

Thank you for coming before us this morning.

Mr. CAMPBELL. Thank you, Senator. I appreciated the opportunity to come here.

(Mr. Campbell subsequently submitted the following statement:) SUPPLEMENTAL STATEMENT OF JAMES A. CAMPBELL, NATIONAL PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

The American Federation of Government Employees endorses the ultimate objectives of the administration pay reform plan which was not available at the time the American Federation of Government Employees statement concerning pay legislation was submitted to the Senate Post Office and Civil Service Committee.

I wish to express our appreciation of the proposal by the administration of a pay reform plan. Such a measure indicates a realization of the need for introducing some greatly needed improvements. We were hopeful, however, that it would deal more effectively with some of the inadequacies of the classified pay system which is the system to which I shall confine my remarks.

The announcement of the plan emphasized its objective as a reform measure rather than as a pay raise. We recognize the need for certain reforms of the Classification Act pay system, but we contend that the most immediate need is an increase of salaries at all grade levels of the general schedule. We disagree with the plan mainly because of its delay of increases in all grades and its failure to provide realistic raises for the first four grades.

An annual review of the classified salary schedule is most desirable. Just such a proposal was suggested by the American Federation of Government Employees 5 years ago, but our proposal envisioned a free judgment of salary conditions, taking into account all pertinent economic conditions existing at the time of the survey.

We strenuously object to judging the adequacies of annual rates of pay solely on the basis of their comparability with rates for similar positions in private industry. There are other salary and wage determinants which also should be taken into account, such as productivity, cost of living, and the economic environment prevailing when existing salaries are evaluated.

We favor such a review as that proposed in a bill recently introduced-H.R. 10908. This bill would authorize the President to appoint a Committee on Federal Pay which would consist of representatives of the Bureau of the Budget, the Civil Service Commission, employee organizations, and the public. The Committee would review the various statutory pay systems in the light of available data for assessing the sufficiency of salaries then in effect as well as determining what other improvements might be deemed necessary.

During the last several years the American Federation of Government Employees has suggested and supported various proposals for amending the Classification Act. We suggested the adjustment upward of the salary of any classified supervisor so as to make certain that his rate of pay would exceed the compensation of any wage board employee supervised by not less than 5 percent. The administration plan would permit a classified supervisor to receive any rate within his grade that would be higher than the rate paid to any wage board employee under his supervision. We are pleased to note the inclusion of such a provision, although we believe that it should be so phrased that there would be some guarantee of the proportional difference between the supervisor's compensation and that of the wage board employee supervised.

The American Federation of Government Employees has supported also a proposal, already pending, that a classified employee should be assured of receiving an increase of salary equal to not less than two pay steps upon his promotion to a higher grade. Such a provision is included in the administration plan.

The pay reform plan modifies the existing longevity provision in the classified pay system. In so doing, it has lengthened the time for attaining the third longevity step which is the maximum rate for the pertinent grade. To this feature of the proposed change we object, because we do not believe that any attempt at reform should deprive an employee of any benefit currently available.

I submit, Mr. Chairman, that before any action is taken to modify and improve the classified pay system, an early determination should be made of an appropriate increase of existing rates of compensation. It is our belief that such a determination should be predicated on all pertinent factors which are recognized as offering a sound basis for evaluating the adequacy of salaries or wages. Then and only then should action be taken to establish an annual review of the salary schedule and other elements of the classified pay schedule. Such a review should be patterned after the proposals in H.R. 10908.

The CHAIRMAN. The next witness is John F. O'Connor, the legislative director, United Federation of Postal Clerks.

Mr. O'Connor, I ask you to identify your colleagues for the benefit of the members of this committee.

STATEMENT OF JOHN F. O'CONNOR, LEGISLATIVE DIRECTOR, UNITED FEDERATION OF POSTAL CLERKS; ACCOMPANIED BY DON E. DUNN, EXECUTIVE VICE PRESIDENT; PAUL A. NAGLE, ADMINISTRATIVE VICE PRESIDENT; AND JOSEPH F. THOMAS, DIRECTOR OF ORGANIZATION

Mr. O'CONNOR. Mr. Chairman and members of the committee, for the record my name is John F. O'Connor and I am legislative director of the United Federation of Postal Clerks. Our headquarters are in Washington, D.C. I am accompanied today by Don. E. Dunn, our executive vice president, Paul A. Nagle, administrative vice president, and Joseph F. Thomas, director of organization. The present name of our organization was brought about by the merger of a number of longtime postal employee organizations, the National Federation of Post Office Clerks, the United National Association of Post Office Craftsmen, the National Postal Transport Association, and several locals of the United Postal Workers.

The last time that Mr. Nagle and Mr. Thomas appeared before your committee they appeared as president of the National Postal Transport Association and United National Association of Post Office Craftsmen, respectively.

We now represent the vast majority of post office clerks in first-, second-, and third-class post offices throughout the United States and its territories. Our present membership is in excess of 140,000 post office clerks in some 15,000 large and small post offices.

May I say here, and this is going off my statement, that you have had and will have more evidence as to the need for a salary increase for all postal and Federal employees. For that reason we are confining our statement to the need of post office clerks. We do, however, believe that all postal and Federal employees are entitled to an increase now.

First, we desire to express our appreciation to the chairman and members of the committee for holding hearings so early. We particularly thank the chairman for introducing S. 2712, which will place the longevity grades of postal employees on a comparable basis with other Federal employees. We are grateful that the chairman of this committee introduced S. 1459 during the 1st session of the 87th Congress and that it passed the Senate by a unanimous vote and by the House almost unanimously.

We were, of course, disappointed that the President of the United States saw fit to veto this legislation. We are looking forward to better success with S. 2712.

We also appreciate the chairman's remarks in his statement made on January 24, when he said that, "The committee will be interested in obtaining a full explanation of the pay reforms referred to by the President in his state of the Union message aimed at 'giving our ǝlassified, postal, and other employees new pay scales more comparable to those of private industry.'

The members of our organization are very much interested in both of these subjects and we appreciate very much the scheduling of hearings on longevity pay for postal employees, and at the same time being given the opportunity to voice our views concerning the need of a salary increase in the postal service.

With reference to the present inequity that exists in connection with longevity pay for postal employees and longevity pay for Federal employees, we believe that it is one that has been in need of correction for a long time.

Longevity increases have long been recognized in the Federal service, as well as in outside industry, as a reward for merit performance by the employees. They are a recognition of experience and know-how and an incentive for employees to do their best on the job. Longevity increases, or for that matter all salary increases, are not automatic, but are given only on the basis of merit performance and faithful service.

Under the present setup there is an inequity existing in the treatment of postal employees and that given to other Federal employees. A postal employee, under present law, at the end of 13, 18, and 25 years of service is given a $100 increase as longevity. The Federal employee is given an in-step increase, in a much shorter period, or after 10, 13, and 16 years of service.

As stated by the chairman of the committee in his release on January 24, hearings on S. 2712 are to be utilized to study the President's proposal to set up salary levels within the Federal Government comparable to employment in outside industry. We were present at the hearing on February 6, at which time the Honorable Elmer B. Staats, Deputy Director of the Bureau of the Budget, testified and also at the hearings on February 15, at which time the Honorable John W. Macy, Jr., Chairman of the U.S. Civil Service Commission, testified.

The general thought expressed in the testimonies of both these gentlemen was that the President's proposal was an endeavor to bring about comparability of postal and Federal employee salaries with those of employees in outside industry.

We certainly have no quarrel with an endeavor such as this as we also desire that our salaries be comparable. We recall with interest the question which the chairman asked of Mr. Staats which was in substance: "Is comparability possible for all Federal positions?" He stated his reason for asking that question was because England had found this could not be the case in one or more special situations.

The chairman then went on to read into the record an excerpt from an English publication. The excerpt pointed out that the Civil Service Commission in England had recommended that the pay and other conditions of civil servants (including post office workers) should be determined on the basis of fair comparison with workers not in Government employment. The excerpt from the publication also stated that this worked fairly well in many grades, but that there were some Government employees for whom there was no outside counterpart, and one was that of postman.

The Government admitted that there was no outside counterpart to postman, but that there were some outside workers doing some parts of it. The organization of postal employees in England oppose this, but nevertheless the method has been applied. The result has been that since 1956, the pay of postal employees in England has been falling in relationship to levels in manufacturing industries.

I might add here, Mr. Chairman and members of the committee, that the same is exactly true in the United States. At one time in the past we were equal to, or ahead of employees in manufacturing industries. Mr. Staats and Mr. Macy indicated that they agreed that there were many positions within the Federal Government which could not be compared with outside industry; precisely mentioned were the foreign service and the postal service. They felt, however, that a relationship could be established.

We are, however, concerned with the manner in which this is going to be done. We know of no employment in outside industry that can be exactly compared with that of a post office clerk. One, we believe, that has some relationship with employment in the postal service, and which we believe should have consideration is that of employment in transportation and public utilities. This covers employment on railroads, local, interurban and suburban transportation, intercity and rural buslines, motor freight transportation and storage, pipeline transportation; communication, telephone, telegraph, and radio and television broadcasting; electric, gas, and sanitary services, electric companies and systems; gas companies and systems, combined utility systems, water, steam, and sanitary systems, all of which are akin to the postal service, inasmuch as the postal service is, to all intents and purposes, a utility system serving the public. It is a means of communication, and the transportation of said communications between one city and another.

We find in a study of the Monthly Labor Review, Bureau of Labor Statistics, U.S. Department of Labor, for January 1962 (see app. E) that the average yearly wage for transportation and public utility workers is $5,814.12. The average yearly wage of a postal worker is $4,853, which leaves a difference of $961.12 between two groups